Minnesota solar panels: The complete guide in 2024

Data updated Jun 11, 2024

Written by: Emily Walker

Interested in going solar? You'll need to install a 11.33 kW solar panel system to cover the average electric bill in Minnesota, which will cost you about $24,757 after the federal tax credit.

Cost for an average system in Minnesota


Out of pocket cost, cash
$35,367
Federal tax credit (30%)
- $10,610
Price post tax credit
$24,757

20-year savings $22,579
Payback period 12 Years
Electricity offset 94%
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As long as your federal tax bill is high enough, you can take advantage of the federal investment tax credit (ITC).

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Going solar in Minnesota

Despite the long winters, solid net metering programs make solar a worthwhile investment for plenty of Minnesotans.

Factor in the federal solar tax credit, and you can cut the cost of solar by thousands of dollars, speeding up your payback periods and increasing the value of your investment.

Here's what you need to know about going solar in The North Star State.

Cost

How much do solar panels cost in Minnesota?

Solar panels will save you a lot of money over time, but the upfront costs aren't cheap. The average Minnesota homeowner needs a 11.33 kW solar panel system to cover their electricity needs, which comes out to $35,367 before incentives. Prices range from $30,062 to $40,672, but after the federal tax credit, that drops by 30%, and Minnesota has some local incentives as well. 

While this may sound high, going solar will pay off in Minnesota. That's why over 15,000 Minnesota homeowners have used EnergySage to receive and compare quotes for solar installations. You can expect to earn back your initial solar investment through electricity savings in about 11.52 years, while most systems last at least 25 years. You'll often see this number referenced as your solar payback period.

There are a few ways to finance your solar panel system so you don't have to provide all that money upfront. 

  • Cash purchase: You'll own the system and pay for it upfront. This provides the best long-term savings. 

  • Solar loan: Allows you to retain ownership of your system, while owing little to no money upfront. Solar loans aren't all created equal: If you have access to subsidized clean energy loans through local incentive programs, that's usually your best bet. A home equity loan or a personal loan are often your next best options – private solar loans typically come with higher interest rates or upfront fees.

  • Solar lease or power purchase agreement (PPA): A third-party company owns your system and either leases you the solar panels (solar lease) or allows you to purchase the electricity they generate (PPA). These generally provide the lowest savings and generate the most negative press about solar. If you choose this financing option, read the fine print: You can get trapped in them for longer than you'd like.

Solar panels on a house

Incentives

What are the best solar rebates and incentives in Minnesota?

Incentives help bring solar's price tag down considerably in Minnesota. Here are the major ones to know about:

Incentive
Average savings in Minnesota
Description

Residential Clean Energy Tax Credit, formerly the federal investment tax credit (ITC)

$10,610

Lowers your solar panel system's cost by 30%

Minnesota solar sales tax exemption

6.875% of your system’s cost

You don't need to pay any sales tax on new solar panel systems in Minnesota

Is net metering available in Minnesota?

In some states, you'll earn bill credits from your utility company when your solar panel system generates excess electricity and sends it to the grid. This incentive is known as net metering—basically a solar buyback program—and makes it so you will owe very little, or even nothing, on your electric bills with solar panels. 

Minnesota's net metering program is solid. Excess solar generation is credited to customers at the average utility energy rate, which is slightly less than what you pay per kWh, but still favorable. Overall, net metering can boost the value of your investment considerably over the years. 

Get the details on net metering in Minnesota or see specific programs below:

A house with rooftop solar panels connected to the grid

Equipment

Equipment quality

Each year, solar panels get more and more efficient—that is, they produce more power per square foot. As of 2024, the most popular solar panels can produce about 400 watts of electricity when they’re in full sunlight. If you want to make the most of your roof’s solar potential, get panels with at least that much power output.  

You should also make sure to select a solar inverter setup that makes sense for your roof’s layout. 

And if you want or need a solar battery, be sure to pick one that can integrate cleanly with that inverter. 

Premium equipment can come with a high price tag, but it will often save you more money in the long run. The best equipment tends to have the best warranty terms, often guaranteed to 25 years (sometimes even 40!), so you’re covered in case you need repairs or replacements. The highest-quality panels also degrade more slowly, so they’ll maintain more of their power output further into the future. 

See our list of the best solar panels

Companies

Who are the best solar installers in Minnesota?

We pre-screen all of the solar companies on EnergySage to ensure they'll provide you with a high-quality installation. We then rate them based on their results, reputation, and responsiveness. Here are the highest-rated EnergySage installers in Minnesota:

resources

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